Montgomery County tax program reports more than $5 million in savings, refunds found

TOWAMENCIN—With the proper training, a handful of volunteers can make a big difference for low-income residents across Montgomery County.

Exactly how big a difference they made was revealed Monday afternoon, as the Montgomery County Asset Building Coalition revealed the results of its 2013 Volunteer Income Tax Assistance program.

“Our total federal refunds totalled $3.4 million; our state refunds were $950,000, so the total refunds to taxpayers were $4,360,000. That’s a lot of money,” said Harriet Winokur, MCABC’s coordinator.

“It gets better. Our services saved taxpayers approximately $675,000 in fees, which is not additional money into their pockets, but it’s money that stays in their pockets — so the total benefit to taxpayers is over $5 million,” she said.

That benefit comes from free income tax preparation that volunteers provide for residents as part of the Internal Revenue Service’s Volunteer Income Tax Assistance (VITA) program. On Monday afternoon, Winokur reported to several dozen volunteers on last year’s successes during a volunteer appreciation ceremony at the Sumneytown Pike headquarters of the North Penn United Way, one of the Coalition’s partner agencies.

“We did over 2,700 tax returns, and the average client’s AGI (adjusted gross income) was $19,600, which means that about half of our clients are living on $20,000 a year or less — that’s a population that needs everything we can help them get,” she said.

“Nationwide, for every dollar that somebody gets as a tax refund, $1.58 goes into the local economy,” Winokur said. Multiply the $5.035 million by that multiplier and the VITA program’s economic impact to the county reaches $6.9 million.

Montgomery County Treasurer Jason Salas said not only was that good news for county taxpayers, it dovetails nicely with the efforts of his office to raise financial awareness: “getting people the tax credits and refunds that they’re due, and helping them to develop savings and investment plans. We’re excited about the potential to grow this (program) in the years to come.”

A breakdown of survey data gathered from VITA applicants showed details of where that money will go. Applications are roughly evenly split between the 20- to 34-, 35- to 49- and 50- to 64-year-old age brackets, with 53 percent of survey respondents identifying as Caucasian, 34 percent African-American and the rest split among other categories.

Volunteer coordinator Ken Haubert, who helped taxpayers at the Norristown office of CADCOM, the Community Action Development Commission, shared his story of how an applicant from a war-torn African country fled to the area after her family members were killed and needed help.

“She had a single W-2, not even a bank account, and this lady was so grateful that someone would help her. At the end, she said, ‘How much?’, and I said $823 (in refund money) and she said ‘No, how much for you?’” said Haubert.

“I said ‘No, we do it for free, it’s our joy to do it for you,’ and the tears just came. Last year a paid agency charged her $200 for what took me minutes,” he said.

Sixty-five percent of those who filed VITA applications are single filers, as compared to only 13 percent who were married couples filing jointly, and data on where they would plan to spend refund money showed four clear top priorities: utility bills, food or clothing, savings, and rent or mortgage payments.

“Those top four are all necessities, and almost every single other option — education, medical expenses, transportation, child care — are too; none of those are, say, trips to Hawaii,” said Hillary Kane, director of the Philadelphia Higher Education Network for Neighborhood Development.

PHENND helped get volunteers in place for the program this year through a partnership with Bryn Mawr College, Kane said. Students who need service hours learn how to help taxpayers with their forms, and in the process learn how to look at their own finances more responsibly.

“Nobody’s going to go to a seminar about how to prepare your own return, and not every (student) wants to work with kids, but if you see the difference this makes for someone, maybe you’ll start to think ‘I should look at my own credit history too,’” said Kane.

She added that PHENND works throughout Montgomery and Delaware counties as well as Philadelphia, and said several colleges in the North Penn area have already been contacted about providing volunteers for the 2014 tax season.

Volunteer Nathan Rosenthal said he got involved in helping prepare tax forms three years ago because he likes the challenge of putting those puzzle pieces together, and said appointment dates for the Pottstown site where he helped file returns were full “by mid-March; if you called in April we had to say ‘Sorry, but call us earlier next year.’”

Winokur said more volunteers could help meet that demand, and she is planning several volunteer outreach events to build that base this fall; for more information or updates visit www.MCAssetBuilding.org or follow @MCAssetBuilding on Twitter.